By KATRINA CREER
Interest-free 10-year loans have been welcomed to fast-track the removal of high-risk combustible cladding from apartment buildings across NSW.
Owners Corporations will be able to apply for financial assistance from next month as part of the State Government’s Project Remediate, which was given the go-ahead last week.
REINSW Strata Chapter Committee member Reena Van Aalst said the scheme will help impacted owners at a time when many are already struggling to overcome the fallout from the COVID-19 pandemic.
“Offering interest free loans is a very big plus - given that strata loans typically attract interest rates of at least eight percent or even higher,” she said.
“When people borrow money it is against an asset, but when a strata group is borrowing, it is an unsecured loan because the bank can’t take the common property and usually it has a maximum term of up to five years.”
NSW Minister for Better Regulations Kevin Anderson said the Government expects cladding to be removed from apartment buildings by 2023. An estimated 225 properties have been identified as having the high-risk cladding. A list of the affected buildings has not been released to the public.
“In order to make it as easy as possible for Owners Corporations to take advantage of this program and get this work started, we have invested up to $139 million to set up a project assurance service that will be coordinated through the Office of the NSW Building Commissioner,” Mr Anderson said.
“We will also help take pressure off Owners Corporations by appointing a managing contractor to oversee each individual project from design to final completion, to help get buildings remediated quickly and to the highest standards.”
Tendering will commence shortly for the financial partners to facilitate the loans and a managing contractor.
A spokesperson for the NSW Department of Customer Service said eligibility of individual buildings will be considered once applications have opened in March.
Sarah Smith, a licensed strata manager from Strata Central, said uncertainty about who can apply for financial assistance has made it difficult for body corporates to plan for repair work.
She is currently working on an apartment complex in Sydney’s Inner West that has been given a Council order to remove combustible cladding.
They do not yet know if they will be successful accessing the interest free loan scheme as only a small part of the building is affected. Preliminary costing for repairs is estimated to be around $1 million which would be shared between the 36 apartments.
“We have a timeframe which we have to comply with, but we can’t get all the information that we need so it is proving quite difficult,” Ms Smith said.
“Only around five percent of our building façade is this combustible cladding, but we do not know yet if we are deemed high-risk.”
Project Remediate was announced in the 2020-2021 State Budget and follows the horrific fire at London’s Grenfell Tower, which killed 72 people in June 2017.
The tragedy highlighted the risk of combustible cladding on the exterior of apartment buildings.
The NSW Cladding Taskforce was established to identify properties with high-risk materials. They audited 185,000 building records with more than 4,100 inspections carried out.
According to the State Government, a list of suitable products to replace the cladding is expected to be announced in March/April.
Project Remediate will also boost the State’s economic recovery from the COVID-19 pandemic, supporting up to 3,500 jobs in the residential apartment construction sector.
Find out more information about building eligibility for Project Remediate.